Hundreds of thousands of people with serious mental illness are falling through the cracks of a mental health system in tatters, a USA Today special report shows.

Mentally ill Americans who have nowhere to go and find little sympathy from those around them often tumble into a de facto mental health system, made up of emergency rooms, county jails and city streets. The lucky ones find homes with family. The unlucky ones show up in the morgue.

“We have replaced the hospital bed with the jail cell, the homeless shelter and the coffin,” says Rep. Tim Murphy, R-Pa., a child psychologist leading an effort to remodel the mental health system. “How is that compassionate?”

States looking to save money have pared away both the community mental health services designed to keep people healthy, as well as the hospital care needed to help them heal after a crisis.

States have been reducing hospital beds for decades, because of insurance pressures as well as a desire to provide more care outside institutions. Tight budgets during the recession forced some of the most devastating cuts in recent memory, says Robert Glover, executive director of the National Association of State Mental Health Program Directors. States cut $5 billion in mental health services from 2009 to 2012. In the same period, the country eliminated at least 4,500 public psychiatric hospital beds — nearly 10 percent of the total supply, he says.

The result is that, all too often, people with mental illness get no care at all.

Nearly 40 percent of adults with “severe” mental illness — such as schizophrenia or bipolar disorder — received no treatment in the past year, according to the 2012 National Survey on Drug Use and Health. Among adults with any mental illness, 60 percent were untreated.

Mental illness costs Americans under 70 more years of healthy life than any other illness, says Thomas Insel, director of the National Institute of Mental Health. That’s because mental illness, unlike cancer or heart disease, is not a disease of aging. It often develops when people are in the prime of life, arising during adolescence or young adulthood. Left untreated, mental illness can rob people of decades of health.

Although some may believe mental illness doesn’t affect them, Insel notes that it costs the country at least $444 billion a year. Only about one-third of that total goes to medical care, Insel says. The bulk of the cost to society stems from disability payments and lost productivity. That total doesn’t include caregivers’ lost earnings or the tax dollars spent to build prisons.

These losses are especially tragic, Insel says, because of growing evidence that early intervention can prevent mentally ill people from deteriorating, halting what once seemed like an inevitable decline.

“The way we pay for mental health today is the most expensive way possible,” Insel says. “We don’t provide support early, so we end up paying for lifelong support.”

Overwhelmed ERs

In Vermont, an ambulance rushed Karen Kelley from her home to a Burlington emergency room, where doctors revived her and saved her life after a suicide attempt.

Three days later, after doctors had made sure that Kelley’s heart hadn’t been damaged by the overdose, they found a place to send her: out of state.

The closest psychiatric bed that staff could locate was in Massachusetts, 215 miles away. The ambulance ride alone cost $3,600, one way. Medicare paid most of the bill.

Kelley was luckier than most.

In March, a psychotic patient spent two weeks in the same ER, waiting for a psychiatric bed to open up, says Ray Keller, medical director of the emergency room at Burlington’s Fletcher-Allen Healthcare, where Kelley was treated. “We’ve got patients living in our emergency department,” he says.

Mental health bed shortages are a national, man-made disaster that people rarely notice until it affects them, Keller says.

“We have to do something. It’s an abomination,” says Keller, noting that he sometimes wonders, “Can’t we get some FEMA trailers in here?”

Mental illness sends nearly 5.5 million people to emergency rooms each year, accounting for 4 percent of all visits, according to the federal Agency for Healthcare Research and Quality. Because many of the mentally ill are uninsured, hospitals often are uncompensated for their care, Pearlmutter says.

That increases the burden both on hospitals and taxpayers, who support emergency care through payments to medical centers that treat a “disproportionate share” of indigent patients. In fiscal year 2012, the U.S. spent $11.4 billion on these payments, about $456 million of that going to the care of the mentally ill.

According to the National Alliance on Mental Illness, 40 percent of adults with serious mental illness are arrested at some point, often for petty crimes — such as loitering or causing a public disturbance — that are caused by their illness, rather than an intent to harm.

About 2 million people with mental illness go to jail every year, according to a 2013 study in Psychiatric Services in Advance. About 15 percent of all state prisoners and 24 percent of jail inmates are psychotic, according to the Bureau of Justice Statistics.

Incarceration carries a high price tag; in New York, the cost to keep one person in prison is $60,000 a year.

Services disappear

As states have cut mental health funding, many have increased spending on prisons and jails, says D.J. Jaffe, executive director of MentalIllnessPolicy.org, which advocates for patients with serious mental illness.

He says research shows that investing upfront in mental health can yield big dividends.

A Georgia study found that providing comprehensive mental health services to mentally ill people involved in the criminal justice system cut the number of days that participants spent in the hospital by 89 percent, and the number of days spent in jail by 78 percent. In all, the program saved more than $1 million in its first year.

A jail diversion program in Massachusetts serving 200 mentally ill people — at an initial cost of $400,000 — saved $1.3 million in emergency health services and jail costs, according to the Massachusetts Department of Mental Health.

FIGURE TO NOTE

The number of inpatient psychiatric beds available to patients who need intense care for short periods has fallen 32.5 percent since 1995, according to the American Hospital Association.